About fixed effects
Fixed effects control for individual effects in a model when there are
multiple observations per individual. (Here, an “individual” may refer to a
person, or to a larger unit of observation, such as a school or county.) Using
fixed effects has the same result as including that category variable as an
explanatory variable, but there are important differences:
- Unlike category variables, fixed effects do not affect the
degrees-of-freedom in the model. Therefore the p-values of standard errors
and the adjusted R2 may differ between a model that uses fixed
effects and one that does not.
- With a large number of individuals, fixed-effect models can be
estimated much more quickly than the equivalent model without fixed
- The estimated values of the fixed effects are not reported.
- If a weighted model is used, the weights are averaged within each value
of the fixed effect variable.
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